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Delaware
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20-4827488
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(State or other jurisdiction
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(I.R.S. Employer
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of incorporation or organization)
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Identification No.)
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101 Hartwell Avenue
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Lexington, Massachusetts
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02421
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer ☐
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Accelerated filer ☒
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Non-accelerated filer ☐
(Do not check if a smaller reporting company)
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Smaller reporting company ☐
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Emerging growth company ☒
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Page
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March 31, 2017
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December 31, 2016
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||||
Assets
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||||
Current assets:
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||||
Cash and cash equivalents
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$
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58,822
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$
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73,488
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Accounts receivable
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409
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327
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||
Prepaid expenses and other current assets
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931
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820
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Inventories, net
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489
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803
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Total current assets
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60,651
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75,438
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Property and equipment, net
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14,468
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13,589
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Restricted cash
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260
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260
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Other assets
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280
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281
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Total assets
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$
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75,659
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$
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89,568
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Liabilities and stockholders’ equity
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Current liabilities:
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Accounts payable
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$
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1,161
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$
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962
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Accrued expenses and other current liabilities
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4,060
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4,908
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Current portion of notes payable
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1,316
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1,269
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Deferred revenue
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2,127
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2,445
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Current portion of lease incentives
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249
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301
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Total current liabilities
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8,913
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9,885
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Notes payable, net of current portion
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39,750
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39,504
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Lease incentives, net of current portion
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791
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792
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Other liabilities
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175
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49
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Commitments and contingencies
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Stockholders’ equity:
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Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding at March 31, 2017 and December 31, 2016
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—
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—
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Common stock, $0.001 par value; 200,000,000 shares authorized; 30,594,342 and 30,482,712 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively
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31
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30
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Additional paid-in capital
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244,391
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242,997
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Accumulated deficit
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(218,392
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)
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(203,689
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)
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Total stockholders’ equity
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26,030
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39,338
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Total liabilities and stockholders’ equity
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$
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75,659
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$
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89,568
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Three Months Ended
March 31, |
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2017
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2016
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||||
Revenue:
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||||
Product revenue
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$
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631
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$
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437
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Research revenue
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310
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|
659
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Total revenue
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941
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1,096
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Costs and expenses:
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Cost of product revenue
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1,627
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1,026
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Research and development
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6,585
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6,589
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Selling, general and administrative
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5,874
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6,204
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Total costs and expenses
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14,086
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13,819
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Loss from operations
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(13,145
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)
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(12,723
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)
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Interest expense, net
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(1,637
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)
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(735
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)
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Other income, net
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79
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32
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Net loss and comprehensive loss
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$
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(14,703
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)
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$
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(13,426
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)
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Net loss per share — basic and diluted
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$
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(0.48
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)
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$
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(0.55
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)
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Weighted-average number of common shares used in computing net loss per share — basic and diluted
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30,531,180
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24,218,767
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Three Months Ended
March 31, |
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2017
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2016
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Cash flows from operating activities
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Net loss
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$
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(14,703
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)
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$
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(13,426
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)
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Adjustments to reconcile net loss to net cash used in operating activities:
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Depreciation and amortization
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694
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529
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Stock-based compensation expense
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1,157
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1,290
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Non-cash interest expense
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639
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148
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Deferred rent
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(53
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)
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(60
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)
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Changes in operating assets and liabilities:
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||||
Accounts receivable
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(82
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)
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9
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Prepaid expenses and other assets
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(111
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)
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(56
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)
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Inventories, net
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314
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(576
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)
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Accounts payable
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199
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679
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Accrued expenses and other liabilities
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(494
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)
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36
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Deferred revenue
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(318
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)
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(409
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)
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Net cash used in operating activities
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(12,758
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)
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(11,836
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)
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Cash flows from investing activities
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Purchases and manufacture of property and equipment
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(1,594
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)
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(2,158
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)
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Net cash used in investing activities
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(1,594
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)
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(2,158
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)
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Cash flows from financing activities
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Payment of offering costs for issuance of common stock in public offering
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—
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(370
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)
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Proceeds from issuance of common stock and stock options exercises, net
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339
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301
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Payments of issuance costs for notes payable
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(354
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)
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—
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|
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Repayments of note payable
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(299
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)
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(80
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)
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Net cash used in financing activities
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(314
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)
|
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(149
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)
|
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Net decrease in cash and cash equivalents
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(14,666
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)
|
|
(14,143
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)
|
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Cash and cash equivalents at beginning of period
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|
73,488
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|
|
73,662
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|
||
Cash and cash equivalents at end of period
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|
$
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58,822
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|
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$
|
59,519
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|
Supplemental disclosures of cash flow information
|
|
|
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||||
Cash paid for interest
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$
|
993
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|
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$
|
517
|
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Supplemental disclosures of noncash investing and financing activities
|
|
|
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||||
Accrued property and equipment
|
|
$
|
61
|
|
|
$
|
132
|
|
|
|
Balance at December 31, 2017
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|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
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Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
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||||||||
Assets:
|
|
|
|
|
|
|
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||||||||
Cash
|
|
$
|
6,702
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|
$
|
6,702
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
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|
52,120
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|
|
52,120
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|
|
—
|
|
|
—
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|
||||
Restricted cash
|
|
260
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|
|
260
|
|
|
—
|
|
|
—
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|
||||
Total
|
|
$
|
59,082
|
|
|
$
|
59,082
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Balance at December 31, 2016
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
$
|
16,887
|
|
|
$
|
16,887
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Money market funds
|
|
56,601
|
|
|
56,601
|
|
|
—
|
|
|
—
|
|
||||
Restricted cash
|
|
260
|
|
|
260
|
|
|
—
|
|
|
—
|
|
||||
Total
|
|
$
|
73,748
|
|
|
$
|
73,748
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Raw materials
|
|
$
|
215
|
|
|
$
|
389
|
|
Work-in-process
|
|
262
|
|
|
351
|
|
||
Finished goods
|
|
12
|
|
|
63
|
|
||
Total inventories, net
|
|
$
|
489
|
|
|
$
|
803
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Office and computer equipment
|
|
$
|
409
|
|
|
$
|
409
|
|
Software
|
|
743
|
|
|
708
|
|
||
Laboratory equipment
|
|
4,562
|
|
|
4,516
|
|
||
Furniture
|
|
200
|
|
|
200
|
|
||
Manufacturing equipment
|
|
910
|
|
|
897
|
|
||
Manufacturing tooling and molds
|
|
154
|
|
|
154
|
|
||
T2-owned instruments and components
|
|
10,522
|
|
|
9,119
|
|
||
Leasehold improvements
|
|
3,353
|
|
|
3,353
|
|
||
Construction in progress
|
|
1,343
|
|
|
1,299
|
|
||
|
|
22,196
|
|
|
20,655
|
|
||
Less accumulated depreciation and amortization
|
|
(7,728
|
)
|
|
(7,066
|
)
|
||
Property and equipment, net
|
|
$
|
14,468
|
|
|
$
|
13,589
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Accrued payroll and compensation
|
|
$
|
1,848
|
|
|
$
|
2,479
|
|
Accrued research and development expenses
|
|
724
|
|
|
846
|
|
||
Accrued professional services
|
|
915
|
|
|
884
|
|
||
Other accrued expenses
|
|
573
|
|
|
699
|
|
||
Total accrued expenses
|
|
$
|
4,060
|
|
|
$
|
4,908
|
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Term loan agreement, net of deferred issuance costs of $2.9 million and $3.0 million, respectively
|
|
$
|
37,624
|
|
|
$
|
37,031
|
|
Equipment lease credit facility, net of deferred issuance cost of $40,000 and $45,000, respectively
|
|
3,442
|
|
|
3,742
|
|
||
Total notes payable
|
|
41,066
|
|
|
40,773
|
|
||
Less: current portion of notes payable
|
|
(1,316
|
)
|
|
(1,269
|
)
|
||
Notes payable, net of current portion
|
|
$
|
39,750
|
|
|
$
|
39,504
|
|
|
|
Number of
Shares
|
|
Weighted-Average Exercise Price Per
Share
|
|
Weighted-Average Remaining Contractual Term
(In years)
|
|
Aggregate Intrinsic
Value
|
|||||
Outstanding at December 31, 2016
|
|
4,042,627
|
|
|
$
|
8.20
|
|
|
7.05
|
|
$
|
4,091
|
|
Granted
|
|
498,450
|
|
|
5.68
|
|
|
|
|
|
|||
Exercised
|
|
(111,630
|
)
|
|
3.03
|
|
|
|
|
328
|
|
||
Forfeited
|
|
(215,608
|
)
|
|
8.60
|
|
|
|
|
|
|||
Cancelled
|
|
(61,574
|
)
|
|
15.35
|
|
|
|
|
|
|||
Outstanding at March 31, 2017
|
|
4,152,265
|
|
|
7.91
|
|
|
7.28
|
|
3,841
|
|
||
Exercisable at March 31, 2017
|
|
2,267,596
|
|
|
6.99
|
|
|
5.92
|
|
3,726
|
|
||
Vested or expected to vest at March 31, 2017
|
|
3,881,040
|
|
|
7.88
|
|
|
7.15
|
|
3,836
|
|
|
|
Three months ended
|
||||||||
|
|
March 31,
|
||||||||
|
|
2017
|
|
2016
|
||||||
Weighted-average risk-free interest rate
|
|
2.02
|
%
|
|
|
|
1.52
|
%
|
|
|
Expected dividend yield
|
|
—
|
%
|
|
|
|
—
|
%
|
|
|
Expected volatility
|
|
63
|
%
|
|
|
|
60
|
%
|
|
|
Expected terms
|
|
6.0
|
|
|
years
|
|
6.0
|
|
|
years
|
|
|
|
|
|
||
|
|
Number of
Shares
|
|
Weighted-Average
Grant Date Fair Value
|
||
Nonvested at December 31, 2016
|
|
272,195
|
|
|
5.83
|
|
Granted
|
|
249,925
|
|
|
5.85
|
|
Vested
|
|
—
|
|
|
—
|
|
Forfeited
|
|
(2,000
|
)
|
|
5.83
|
|
Canceled
|
|
—
|
|
|
—
|
|
Nonvested at March 31, 2017
|
|
520,120
|
|
|
5.84
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
Cost of product revenue
|
|
$
|
30
|
|
|
$
|
26
|
|
Research and development
|
|
302
|
|
|
270
|
|
||
Selling, general and administrative
|
|
796
|
|
|
968
|
|
||
Total stock-based compensation expense
|
|
$
|
1,128
|
|
|
$
|
1,264
|
|
|
|
Three Months Ended
March 31, |
||||
|
|
2017
|
|
2016
|
||
Options to purchase common shares
|
|
4,152,265
|
|
|
3,887,285
|
|
Restricted stock units
|
|
520,120
|
|
|
—
|
|
Warrants to purchase common stock
|
|
528,958
|
|
|
—
|
|
Total
|
|
5,201,343
|
|
|
3,887,285
|
|
•
|
our expectation to incur losses in the future;
|
•
|
the market acceptance of our T2MR technology;
|
•
|
our ability to timely and successfully develop and commercialize our existing products and future product candidates;
|
•
|
the length of our anticipated sales cycle;
|
•
|
our ability to gain the support of leading hospitals and key thought leaders and publish the results of our clinical trials in peer-reviewed journals;
|
•
|
our ability to successfully manage our growth;
|
•
|
our future capital needs and our need to raise additional funds;
|
•
|
the performance of our diagnostics;
|
•
|
our ability to compete in the highly competitive diagnostics market;
|
•
|
our ability to obtain marketing clearance from the FDA or regulatory clearance for new product candidates in the United States or any other jurisdiction;
|
•
|
federal, state, and foreign regulatory requirements, including FDA regulation of our product candidates; and
|
•
|
our ability to protect and enforce our intellectual property rights, including our trade secret-protected proprietary rights in T2MR.
|
•
|
recurring revenue from our consumable diagnostic tests will increase and become subject to less period-to-period fluctuation;
|
•
|
consumable revenue will become an increasingly predictable and important contributor to our total revenue; and
|
•
|
we will gain economies of scale through the growth in our sales, resulting in improving gross margins and operating margins.
|
|
|
Three Months Ended
March 31, |
|
|
||||||||
|
|
2017
|
|
2016
|
|
Change
|
||||||
|
|
(in thousands)
|
||||||||||
Revenue:
|
|
|
|
|
|
|
||||||
Product revenue
|
|
$
|
631
|
|
|
$
|
437
|
|
|
$
|
194
|
|
Research revenue
|
|
310
|
|
|
659
|
|
|
(349
|
)
|
|||
Total revenue
|
|
941
|
|
|
1,096
|
|
|
(155
|
)
|
|||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|||
Cost of product revenue
|
|
1,627
|
|
|
1,026
|
|
|
601
|
|
|||
Research and development
|
|
6,585
|
|
|
6,589
|
|
|
(4
|
)
|
|||
Selling, general and administrative
|
|
5,874
|
|
|
6,204
|
|
|
(330
|
)
|
|||
Total costs and expenses
|
|
14,086
|
|
|
13,819
|
|
|
267
|
|
|||
Loss from operations
|
|
(13,145
|
)
|
|
(12,723
|
)
|
|
(422
|
)
|
|||
Interest expense, net
|
|
(1,637
|
)
|
|
(735
|
)
|
|
(902
|
)
|
|||
Other income, net
|
|
79
|
|
|
32
|
|
|
47
|
|
|||
Net loss
|
|
$
|
(14,703
|
)
|
|
$
|
(13,426
|
)
|
|
$
|
(1,277
|
)
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2017
|
|
2016
|
||||
|
|
(in thousands)
|
||||||
Net cash used in:
|
|
|
|
|
|
|
||
Operating activities
|
|
$
|
(12,758
|
)
|
|
$
|
(11,836
|
)
|
Investing activities
|
|
(1,594
|
)
|
|
(2,158
|
)
|
||
Financing activities
|
|
(314
|
)
|
|
(149
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(14,666
|
)
|
|
$
|
(14,143
|
)
|
|
T2 BIOSYSTEMS, INC.
|
|
|
|
|
Date; May 8, 2017
|
By:
|
/s/ JOHN MCDONOUGH
|
|
|
John McDonough
|
|
|
President, Chief Executive Officer and Director
|
|
|
(principal executive officer)
|
|
|
(principal financial officer)
|
|
|
|
•
|
The Company currently provides contributions toward a medical and dental plan for yourself and immediate family members
|
•
|
Three (3) weeks paid vacation, Company designated holidays, personal holidays and sick days (see Benefits Summary for more information).
|
•
|
The Company provides 100% contribution towards Term Life Insurance, Accidental Death and Dismemberment Insurance, and Short and Long-Term Disability Insurance;
|
•
|
The opportunity to enroll in the Company’s 401(k) Investment and Section 125 Plans based on plan eligibility requirements; and
|
•
|
Pay or reimburse you in accordance with the Company’s reimbursement policies from time to time in connection with the performance of your duties for the Company subject to your submission of satisfactory documentation with respect thereto.
|
SECTION 1.
|
Definitions; Interpretation
.
|
SECTION 3.
|
Conditions of Effectiveness
. This Amendment shall become effective upon the execution and delivery of this Amendment by the Borrower, the Administrative Agent and all of the Lenders.
|
/s/ John McDonough
|
|
John McDonough
|
|
President, Chief Executive Officer and Director
|
|
(principal executive officer)
|
|
/s/ John McDonough
|
|
John McDonough
|
|
President, Chief Executive Officer and Director
|
|
(principal financial officer)
|
|
|
|
/s/ John McDonough
|
|
John McDonough
|
|
President, Chief Executive Officer and Director
|
|
(principal executive officer)
|
|
(principal financial officer)
|
|